April 2, 2019

CMS finalizes 2.5% MA payment bump, changes to risk-adjustment model for 2020

Daily Briefing

    CMS on Monday finalized payment and policy changes for Medicare Advantage (MA) and Medicare Part D plans for the 2020 coverage year.

    Webconference tomorrow: The 2019 Medicare Advantage growth outlook

    CMS finalizes changes to MA plan payments, benefits

    CMS finalized an average 2.53% increase to baseline payment rates for MA plans in 2020—up from the average 1.59% increase it had proposed in January. However, the average 2.53% increase still is down from the 3.4% increase MA plans received in 2019.

    CMS also finalized several benefits changes intended to address the opioid epidemic and give MA plans more flexibility to offer benefits intended to improve the health of chronically ill beneficiaries.

    CMS in a fact sheet said MA plans in 2020 will have "new flexibilities to offer targeted benefits and cost sharing reductions for patients with chronic pain or [those] undergoing … treatment" for substance use disorders. For example, MA plans under the finalized changes will be able to offer benefits designed to promote the use of non-opioid treatments for chronic pain—such as cognitive behavioral therapy, peer support services, and therapeutic massage—if recommended by a physician.

    CMS also finalized updates to opioid-related measures used for MA star ratings. In addition, the agency said it will encourage Medicare Part D plans to lower cost-sharing requirements for medications that can reverse opioid drug-related overdoses.

    CMS under the finalized policy also is allowing MA plans to offer more benefits to beneficiaries with chronic conditions. MA plans under the finalized policy will be able to provide chronically ill beneficiaries with any benefits that would improve or maintain their health. For example, CMS in a fact sheet said MA plans in 2020 will be able to provide chronically ill patients with "meals beyond a limited basis, transportation for non-medical needs, and home environment services," such as carpet shampooing and home air cleaners for asthma patients.

    CMS Administrator Seema Verma said the "changes give plans the ability to be innovative and offe[r] benefits and services that address social determinants of health for people with chronic disease." She added, "With [MA] enrollment at an all-time high, plans need greater flexibility in offering benefits that … focus on preventing disease and keeping people healthy."

    CMS finalizes changes to MA risk adjustment model

    CMS also finalized a proposal to phase in several changes to its MA risk adjustment payment model, which the agency is required to do by 2022 under the 21st Century Cures Act.

    For instance, CMS will implement the Payment Condition Count model, which will account for the total number of medical conditions a beneficiary has that qualify for the risk adjustment model.

    CMS also finalized its proposal to incorporate encounter and inpatient data into a beneficiary's risk score beginning in 2020. To do so, CMS said it will base:

    • 50% of a beneficiary's 2020 risk score on fee-for-service data, down from 75% in 2019; and

    Webconference tomorrow: The 2019 Medicare Advantage growth outlook

    Medicare Advantage enrollment penetration is slated to increase to well over 50% by 2025. With the continued year-over-year increases in reimbursement rates and loosened restrictions on certain benefits for high-value services, health plans are eager to capitalize on new opportunities to grow their membership and increase their profit margin.

    Join our experts tomorrow at 1 pm ET to learn the key challenges consumers face as they enroll in Medicare Advantage products.

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